Right of First Refusal (ROFR / FOFR)
What is the Right of First Refusal?
The Right of First Refusal (often called ROFR) is a statutory protection for leaseholders. Under Part 1 of the Landlord and Tenant Act 1987 (as amended), when a landlord or head-lessor wishes to dispose of their interest in a block (for example, selling the freehold, assigning a superior lease, or transferring an interest), the leaseholders (qualifying tenants) must be given the first chance to buy before the property is offered to external buyers.
You may also see “FOFR” used informally to describe contractual “first offer/first refusal” clauses agreed in private documents. Those are not the statutory 1987 Act right, and they can have different triggers, timetables and remedies. This page focuses on the statutory ROFR, but we can advise on contractual FOFR provisions too.
In essence:
- The landlord must issue a formal offer notice (a Section 5 Notice) to the qualifying tenants, setting out the terms on which the interest will be sold. There are different types of Section 5 notices and the variant matters, they include:
- s.5A (Private sale): used where the landlord proposes a private sale at a stated price.
- s.5B / s.5C (Contract including intermediate interests/leases): used where the disposal structure differs (e.g., a contract or grant/assignment of a lease).
- s.5D (Auction): used where disposal is by public auction.
- The notice must set out the terms (price, deposit, contract conditions) and give at least two months for a tenant response, during which the landlord cannot sell to others or change terms to be less favourable.
- If the landlord fails to comply (e.g. sells without giving the offer), the tenants may have statutory remedies, including forcing a sale on the same terms.
However, ROFR is not a right to force the landlord to sell in the first place (that is the domain of enfranchisement). ROFR only applies once the landlord has decided to dispose.
Why ROFR Matters to Leaseholders
- Priority over external buyers: You get the chance to acquire the interest ahead of anyone else.
- Prevent unfavourable new ownership: You can prevent a third party (who might be less responsive or more costly) from becoming your landlord.
- Opportunity to control management: If you act, you can combine ROFR with collective enfranchisement or a right-to-manage route, giving you influence over building management.
- Statutory protections: The law sets limits on how the landlord can behave — e.g. they cannot sell on worse terms without re-offering.
- Remedies for noncompliance: If the landlord skips the process, you may force a sale or claim enforcement, giving you legal leverage.
However, ROFR comes with constraints and risks: you cannot negotiate the price (it is set by the landlord), timing is tight, and procedural missteps can invalidate your rights. That’s why expert legal support is essential.
When Does ROFR Apply — Trigger Events & Scope
ROFR is triggered by certain “relevant disposals” by the landlord (or headlessor). Understanding exactly what counts is crucial to know whether ROFR applies.
Types of Disposals That Trigger ROFR
Relevant disposals may include:
- Sale of the freehold interest in a building containing flats
- Granting or assigning a headlease (a lease over the entire building or the parts held by the landlord) with a term exceeding seven years or convertible into a lease of that length
- Transfer to an associated company (in some cases) — though this may be exempt if certain conditions (association for 2+ years) are met
- Disposal in proceedings such as bankruptcy, receiver, or executor, where the right might later apply (though initial transfers in such contexts may have exemptions)
However, not all transfers are caught. Examples of exempt disposals include:
- Transfers by way of gift or succession (e.g. by will or intestacy)
- Court-ordered disposals or statutory compulsion
- Transfers between family members
- Transfers by a mortgagee exercising power of sale or in certain financial restructurings Disposals arising from collective enfranchisement (you can’t use ROFR to override enfranchisement).
Because the boundary of relevant vs exempt disposal is technical, it’s essential to get legal advice at the start.
Qualifying Conditions for ROFR
In order for ROFR to apply, certain building, landlord, and tenant criteria must align. These include:
Because these eligibility criteria are strict and often litigated, we begin with a careful qualification audit before proceeding.
The ROFR Process: Step by Step
Here is a typical workflow we would follow when representing leaseholders (or a landlord) in a ROFR case:
1. Pre-Notice Audit & Strategy
- We review the leases, title, floor plans, and prior sales history
- We map out whether ROFR is likely to apply (building, landlord, tenants)
- We assess timing, cost, risk and whether to combine with enfranchisement or other routes
- We advise whether to act immediately or wait for a more favourable structure
2. Drafting & Serving the Offer Notice (Section 5 Notice)
- The landlord must prepare a Section 5 Offer Notice (or 5A / 5B variant as appropriate)
- The notice must state: the disposal terms (price, deposit, contractual terms), the interest being sold, and the period for response (minimum two months)
- It must be served on at least 90% of qualifying tenants (if there are more than 10) or all but one (if fewer than 10)
- The notice must comply with formal statutory requirements (content, clarity, delivery)
3. Tenant Response & Acceptance
- Qualifying tenants decide whether to accept the offer collectively within the specified period.
- Tenants must serve a Section 6 Acceptance Notice on the landlord.
- Acceptance must be on the same terms as the offer. Tenants cannot negotiate a different price or terms under ROFR.
- The tenants then nominate a purchaser—typically a company formed specifically to act as their nominee purchaser. They have a further two months to make that nomination.
- Forming a nominee purchaser company is standard practice to manage collective tenant purchases. This company will hold the freehold or headlease interest on behalf of the leaseholders and may have ongoing administrative responsibilities such as managing funding, meetings, and future lease management decisions.
4. From Acceptance to Contract & Completion
- The landlord must deliver a draft contract to the nominee purchaser within one month of acceptance
- The nominee purchaser then has two months to sign the contract, pay the deposit, and exchange contracts
- Completion then follows under the contract terms (typically within 4–6 weeks)
5. Sale to Third Party Post-RoFR
- If tenants do not accept in time, the landlord is free to sell to a third party—but only on the same terms and price offered initially (or better, i.e. not worse) for up to 12 months.
- If the landlord proposes a lower price or different terms, he must re-offer the ROFR to the qualifying tenants anew.
6. Remedies for Noncompliance
If the landlord fails in their statutory duty, tenants may be able to:
- Step into the purchaser’s shoes: This “stepping into the shoes” provision means tenant rights extend beyond the original landlord, protecting against subsequent sales completed in breach of ROFR.
- Force resale: Leaseholders have the right to serve a legal notice on the new owner requiring them to sell the freehold or headlease interest to the leaseholders’ nominee purchaser at the same price as the original sale.
- Criminal sanctions: the landlord may face criminal prosecution with fines of up to £5,000 for failure to comply with the Right of First Refusal procedures.
- Treat sale as void or invalid: Sales executed without following ROFR can be challenged by leaseholders through court action and may be set aside or declared void.
- New owners obligations: New owners are obligated to provide leaseholders with detailed information about the sale, promoting transparency and enabling enforcement of ROFR rights.
Prompt legal action is critical as there are time limits that restrict the period during which leaseholders can enforce these rights. Plus the legal consequences of mis-stepping are serious: precision in notice drafting and valuation is vital.
Challenges, Risks & Strategic Considerations
ROFR offers potential advantages, but it is not free of hazards. Below are common pitfalls and how Jonathan Lea Network mitigates them:
| Risk / Challenge | Strategy & Mitigation |
| Overpriced offer by the landlord | Even though you can’t negotiate under ROFR, we instruct independent valuation and advise whether acceptance (or alternative route) is worthwhile. |
| Missed deadlines or procedural defect | Strict statutory time limits apply. A minor flaw in notice form, content or service can invalidate the entire process. We ensure compliance and cross-check every step. |
| Insufficient tenant participation / consensus | If enough qualifying tenants don’t accept, the right fails. We coordinate communication, encourage participation, and help form decision-making group or company. |
| Landlord withdrawing the offer | The landlord can potentially withdraw before contract stage. We counteract with strict tracking and prompt acceptance where advisable. |
| Later sale on altered terms | If the landlord sells on different terms without re-offering, that is unlawful. We monitor post-acceptance and potential reoffers to protect your rights. |
| Complex chain transactions or connected parties | Disposals via associated companies, complex lease structures, or corporate reorganisation may test ROFR’s limits. We analyse and challenge these sophisticated strategies. |
| Conflict with other statutory route (enfranchisement) | Sometimes combining ROFR with enfranchisement or RTM is strategically better. We can assess whether accepting a ROFR offer is optimal or whether to pursue a different route. |
Because of these nuances, early legal oversight is crucial — a wrongly drafted notice or misstep can permanently extinguish your right.
Why Choose Jonathan Lea Network for ROFR Work?
Leasehold Expertise & Litigation Experience:ROFR is a niche and technical area. Our lawyers are experienced in leasehold, enfranchisement, and Tribunal work. We blend strategic insight, statutory precision, and litigation readiness.
Proactive, Client-Focused Strategy:From day one, we assess risks, costs, and timing and propose a bespoke strategy (either accept ROFR or pursue alternate rights). You remain fully informed at every step.
Transparent Fees & Cost Control:We break down the ROFR process into phases with cost estimates for each. Where possible, we offer fixed or capped fees for drafting notices or handling acceptance stages.
Robust Notice & Compliance Drafting:Given that many ROFR disputes turn on a small error in a notice, we meticulously draft, proofread, and deliver notices to legal standard, reducing risk of challenge.
Dispute & Enforcement Capability:If the landlord fails to comply or disputes eligibility, we are ready to litigate, apply for orders, or force enforcement. We are not passive advisers — we act decisively to protect your rights.
Next Steps
A landmark 2025 High Court decision, SGL 1 Ltd v FSV Freeholder Ltd, provides critical clarity on how to interpret the term “building” under the Landlord and Tenant Act 1987 in relation to the Right of First Refusal. This ruling affects how landlords must serve Section 5 notices when disposing of estates involving multiple residential blocks. It highlights the importance of precise legal advice to ensure compliance and protect leaseholders’ rights.
At the Jonathan Lea Network, we keep up to date with all ROFR developments to ensure our clients benefit from the latest legal insights when navigating ROFR claims.
If your landlord is proposing to sell their interest, or you suspect a sale has already happened without proper ROFR procedures, time is of the essence. ROFR rights are strictly time-based and procedural. Delays or inaction may permanently forfeit your advantage.
Contact Jonathan Lea Network now for a no-obligation ROFR review. We will:
- Examine your lease and building for ROFR eligibility
- Assess the validity of any offer notice you’ve received
- Advise on whether to accept, reject, or challenge
- Prepare the legal steps if you choose to proceed
Don’t let procedural missteps or landlord oversights rob you of your statutory priority. Enjoy expert protection, clarity, and decisive action with Jonathan Lea Network.
If you have any questions or would like further advice on the above, then please call us on 01444 708 640 or email us at wewillhelp@jonathanlea.net
Frequently Asked Questions
No, under ROFR, the landlord’s offer is fixed. You must accept or reject. If the price seems unfair, we can advise whether to reject and explore collective enfranchisement instead. That may forfeit your right. The statutory time limits are strict. If you have missed it, you lose priority and the landlord may proceed to sell (though subject to being unable to change terms). Always act promptly. Yes. Sometimes leaseholders accept ROFR to get the interest and then extend or vary the terms. We advise which route produces the best net outcome in your situation. Yes, you may have remedies such as stepping into the purchaser’s shoes or compelling a resale on the same terms. But you must act urgently and legally. It may, but the specifics depend on whether the building qualifies (e.g. containing two or more flats, residential use proportion, etc.). We review your building’s structure to see if ROFR is invoked. Transfers between family members can sometimes be exempt from ROFR (i.e. not counted as a “relevant disposal”). We check the facts, timing, and details to see whether ROFR should have applied.
Learn More: How Lease Extensions Work and Why They Matter
For a clearer understanding of leaseholder rights and the practical steps involved, watch our video featuring Kent Reynolds, Senior Solicitor at Jonathan Lea Network.
Kent explains the lease extension process, common pitfalls, and how expert advice can protect your property’s long-term value. These same principles underpin our wider leasehold services, including enfranchisement, RTM, and deeds of variation.
Photo by Sigmund on Unsplash
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